Equip Super, TelstraSuper terminate merger plans

Equip Super and TelstraSuper will no longer merge, with the latter saying it was unlikely to achieve its objectives.

TelstraSuper has decided to terminate the Heads of Agreement the two funds signed late last year, concluding it was not going to be in the best interests of TelstraSuper members. They had been in discussions since at least September, when they first announced a Memorandum of Understanding had been signed.

It was to be a "merger of equals" which would have created a $60 billion fund, home to more than 225,000 members. However, TelstraSuper said it has become evident it could not proceed.

"Bringing together two medium-sized funds is a complex process. As the merger process has progressed, and particularly in the period since the binding agreement was signed, it has become evident that TelstraSuper is unlikely to achieve our objectives for the merger, in the best financial interests of the fund's members," TelstraSuper said.

It's quite an about-face, as the merger plans were well progressed; the two had already decided on the combined funds' leadership team, and TelstraSuper's chief investment officer had already flown the coup for a role with Mercer.

The fund said it continues to review its strategic direction and long-term options, but planning for this particular merger has come to an end. Had it continued, the merger was to take place later this year.

It added that the fund remains in a healthy position, seeing positive net member growth, high member advocacy, and a growing retirement segment.

As at December end, TelstraSuper had 97,420 member accounts, some 71,540 of which were active. The median account balance was $152,000 and the median member age was 53; close to 60% of members are aged over 50.

"TelstraSuper remains committed to helping members achieve the best retirement outcome possible and would like to thank Equip Super for their engagement throughout the process," TelstraSuper chair Anne-Marie O'Loghlin said.

Equip Super said it is disappointed with the decision taken by the corporate fund.

"Over the past 10 years we have grown significantly through a number of successful mergers, including with Catholic Super and with the Rio Tinto, BOC Gases and Toyota corporate funds. We will continue to explore further growth, however our current scale enables us to maintain our primary focus which will always be delivering the best possible retirement outcomes for our members through strong, long-term performance, competitive fees and excellent service," Equip Super chair Michael Cameron said.

TelstraSuper first flagged it was on the hunt for a merger partner in May 2024, saying at the time that just 25% of its current members work for Telstra and, with this diversified membership, it was eager to move away from the corporate entity.

With $28 billion in funds under management, TelstraSuper is the largest remaining corporate super fund in Australia.